Last month, NYSE Texas became the first securities exchange to be incorporated in Texas.

The funny thing is, NYSE Texas was originally NYSE Chicago, until the New York Stock Exchange announced it was reincorporating NYSE Chicago to NYSE Texas about two months ago.

The move to Texas comes almost nine months after TXSE announced it was building a Texas stock exchange in Dallas. TXSE is backed by institutional investors including Blackrock, Citadel, Fortress, and more. The exchange raised $161M in anticipation of a 2026 launch, making it the most well capitalized stock exchange launch of all time.

Now NYSE Texas is looking to rain on the parade.

NYSE is the largest stock exchange in the world by market capitalization - $28 trillion - and its history is rich as well.

The New York Stock Exchange was created in 1792 when the Buttonwood Agreement was signed by 24 brokers.

• the agreement set a floor commission rate charged to clients and forced the brokers that signed it to give preference to the other 23 brokers when selling securities

• securities initially traded include war bonds, First Bank of the United States stock, and Bank of New York stock

Around the same time, the Philadelphia Stock Exchange (PHLX) was considered just as good, or even better, than the NYSE. It took a technological shift, the invention of the telegraph, to push the NYSE over the edge.

In 1864, the NYSE merged with a local competitor, the Open Board of Stock Brokers, and became the leading exchange due to the sheer number of buyers and sellers that guaranteed a baseline level of liquidity.

In 1925, Goldman Sachs bought a young Sidney Weinberg a seat on the New York Stock Exchange.

It cost $185,000 at the time, or about $3.2M today.

In the 1980s, NYSE was operating on an open outcry system. Open outcry is exactly what it sounds like - traders would gather on the trading floor and shout out orders, sometimes using hand signals.

• a broker receiving a buy order for IBM shares would walk to the IBM trading post, negotiate prices with specialists, and finalize deals through verbal agreements and paper tickets

• prices were not transparent… only floor traders knew real-time bids and offers, and investors faced fees as high as $20 / trade, limiting access across the board

• Microsoft’s 1986 IPO involved underwriters manually setting an initial price ($21/share) and brokers scrambling to match buy/sell orders on debut day. The process relied on phone calls and physical order slips, creating delays and inefficiency

It looked something like this:

The visuals above don’t do it justice; Wall Street in the 80’s was a jungle, point blank.

In Liar’s Poker, Michael Lewis talks about life on Wall Street during that time period, and gives an anecdote of how intense the trading floor was. Apparently, one newly hired analyst was too terrified to even step onto it. Instead, he rode the elevator up and down all afternoon, unable to face the fire. Word spread quickly, and eventually, the trainee disappeared.

In the 1990s, NYSE began implementing technology to reduce friction.

• Handheld Devices (1992): Brokers used Epson handhelds to input orders digitally, replacing paper slips.

• Flat-Panel Displays (1995): Real-time data screens replaced chalkboards, improving price visibility.

• Electronic Matching (2000): The Direct+ platform automated small orders (≤1,099 shares), though floor brokers still dominated large trades

Technology eventually won out, and public markets became more efficient as a result.

Technology has the unique ability to increase market efficiency, and private markets are up next.

Already, late stage secondary trading platforms are beginning to see fairly liquid trading for names like SpaceX, Stripe, OpenAI, and Anthropic.

But most of venture capital still operates with the same level of manual market making as NYSE in the 1980s.

It’s only a matter of time before that changes for good.

The Texas Stock Exchange was founded to take advantage of a booming economy in the Lone Star state while increasing competition between exchanges.

Its investors and founders feel as if though the NYSE and other major exchanges are not investor-friendly or issue-friendly platforms. Right now, NYSE and NASDAQ operate as a duopoly.

TXSE wants to attract companies - especially those frustrated by increasingly stringent listing standards, regulatory burdens, and higher costs imposed by NYSE and NASDAQ - by positioning itself as cost effective and business friendly. Trading will be fully electronic.

As stated earlier, NYSE’s move is a clear response to the emergence of TXSE. The New York Stock Exchange is working tirelessly to protect its market share in a key battleground state. NYSE Texas will offer another listing venue for companies drawn to Texas, leveraging NYSE’s brand, regulatory expertise, and the fact that Texas already hosts more NYSE listed companies than any other state.

TXSE forfeited its first mover advantage because of the SEC filings involved that pushed its initial trading date to 2026.

On a separate note, Dallas is slowly turning into a major financial hub…

Headlines

• Thrive Capital is setting up a holding company to acquire everyday businesses and incorporate technology. NYT

  • Thrive follows in the footsteps of General Catalyst and 8VC

• OpenAI upgrades ChatGPT search with shopping features. TechCrunch 

• Secondaries as the new IPO is no passing fad. Fortune

• Shaq agrees to be Sac State basketball GM. ESPN